Deccan Chargers reject sole bid for franchise

The auction for the IPL Deccan Chargers franchise on Thursday has ended in an anti-climax with the team's owners rejecting the sole bid they received. This leaves the franchise's future up in the air, with the BCCI 's working committee meeting on Saturday likely to take a decision on its next course of action.

The solitary bid reportedly came from PVP Ventures, a company that finances film projects in India. No details were made public but reports said the offer was for Rs 900 crore ($164 million). Only three bidders had evinced interest to buy the Chargers: besides PVP Ventures, RPG Group and Jaypee Group also bought the bid document. However on the day of the auction only PVP turned up.*

"They [the franchise] informed us that the price and terms were not suitable so they did not accept it," BCCI president N Srinivasan said in Chennai. "The BCCI assisted the Deccan Chargers and we also looked at the eligibility criteria, whether they were fit and proper. We found that the party was acceptable to us. After that, though, it was between Deccan Chargers and the bidder."

Today's development puts the ball squarely back with the BCCI, which could conceivably terminate the agreement with Chargers and put the players on the auction block. Though no decision has formally been taken, it is understood that the board has lost patience with Deccan Chronicles Holdings Limited (DCHL). Its plan for the way forward could include terminating the contract with Chargers and floating a tender to add a new team to the IPL. There would be a shortlist of cities for the bidders to choose from, with the location of the new franchise to be decided by the highest bid for one of those cities.

"DCHL have been been found out for various violations," a board official told ESPNcricinfo. "The BCCI tried to pitch in and help but that has not proved useful. The board needs to protect the IPL model and a new franchise can only enhance the IPL."

If the board does scrap Chargers' contract then it will encash the bank guarantee of the franchise to settle the dues of the players. Most players and coaching staff are reportedly yet to receive 85% of their contracted amount.

A positive outcome today could have changed that but it is understood that while DCHL were happy to go with the offer, the company's lending banks, rejected it. "The lenders [banks] and the owner [DCHL] could not come to an agreement over the mode of payment proposed by the bidder," the official said.

The official said the banks were not happy with PVP's plan to divide the bid amount in two parts over the next ten years. "They said they would pay Rs 450 crores ($82 million) in the next five years, at the rate of 90 crore per annum, and the rest in 2022," the official said. The banks' reluctance, the official said, could stem from the fact that they stood to receive the sale proceeds - which, in this case, would be staggered.

Last month, the banks had knocked on the BCCI's doors to help them out, after which the board had set a deadline of September 15 for Chargers to clear all their dues including player payments and report with a clean slate. However, DCHL said they were unable to sort out the problems and, after seeking the board's intervention, placed an advertisement announcing that the franchise was for sale.

The board official said that Chargers still had two days' time to figure out their final decision: "The [BCCI] decision could depend on what the Chargers report on Saturday."

Thursday's development is a harsh reality check for the IPL, whose valuations across several properties and deals had brought the BCCI, its owners, more than $2 billion. Mumbai Indians were the costliest franchise at $111.9 million in the first team auction in 2008, with Chargers third at $107 million; just two years later, the Sahara group successfully bid $370m for Pune Warriors while the Kochi franchise, now dissolved, fetched $333 million.

Now, however, franchises are experiencing operational difficulties vis-à-vis the IPL. Chargers and Royal Challengers Bangalore have delayed payments to their players; some franchises with multiple owners are reported to be looking at selling stakes to raise funds.

* September 13, 19.30 GMT This story has been updated with the details of potential bidders

So this is why many Indians wanted the SLPL to fail. The irony is that both Kochi and Kerala had Lankan captains. LOL.

TheWayCrciketShouldBePlayed
on September 15, 2012, 8:41 GMT

@ Thushaa, Do you know how any team perform next season?

TheWayCrciketShouldBePlayed
on September 15, 2012, 8:12 GMT

Kochi Down
DC Down
8 More Wickets to go for All Out!

Thushaa
on September 15, 2012, 7:28 GMT

End of DC. Their fate was on the wall, literary. Actually all low performing teams should be scrapped, as they don't give any colour or competitiveness to the IPL .
They just slowing things down and taking the fan base down also.
Time to cut down on the teams and make IPL more competitive.

Thushaa
on September 15, 2012, 2:15 GMT

A team like the Chargers are also having difficulties.. hmm, its time to say Bye to Chargers I think, anyway their time is up ,as they look exhausted and their fan base is also seems going down. Time for a new team, or just stick with the rest of the teams...
T.Dinesh

Thushaa
on September 15, 2012, 2:12 GMT

Hmm..this is alarm bells for IPL. If a good team like the Chargers are also having difficulties, its going to be real hard if a team goes into the relegated zone in one year to get running in the next years' IPL. The model has to be revamped or totally scrapped.
Time for all teams to think deep, as this may be the beginning of the end. As a Indian fan, I will be really afraid of these developments. As the IPL is getting kind of boring and fan base is loosing interest, time for some serious thinking.

on September 15, 2012, 1:04 GMT

People are talking about NBA/NFL/EPL as role models but they forget these teams play many more games to operate. Nobody is going to sit and watch each franchise play 30-40 odd t20 games, which in effect is a cut down version of a proper game of cricket (unlike football, baseball, basketball). Therefore the value and operating costs these franchises can operate under is far smaller and the BCCI are being unrealistic if they think a franchise is worth hundreds of millions.

So this is why many Indians wanted the SLPL to fail. The irony is that both Kochi and Kerala had Lankan captains. LOL.

TheWayCrciketShouldBePlayed
on September 15, 2012, 8:41 GMT

@ Thushaa, Do you know how any team perform next season?

TheWayCrciketShouldBePlayed
on September 15, 2012, 8:12 GMT

Kochi Down
DC Down
8 More Wickets to go for All Out!

Thushaa
on September 15, 2012, 7:28 GMT

End of DC. Their fate was on the wall, literary. Actually all low performing teams should be scrapped, as they don't give any colour or competitiveness to the IPL .
They just slowing things down and taking the fan base down also.
Time to cut down on the teams and make IPL more competitive.

Thushaa
on September 15, 2012, 2:15 GMT

A team like the Chargers are also having difficulties.. hmm, its time to say Bye to Chargers I think, anyway their time is up ,as they look exhausted and their fan base is also seems going down. Time for a new team, or just stick with the rest of the teams...
T.Dinesh

Thushaa
on September 15, 2012, 2:12 GMT

Hmm..this is alarm bells for IPL. If a good team like the Chargers are also having difficulties, its going to be real hard if a team goes into the relegated zone in one year to get running in the next years' IPL. The model has to be revamped or totally scrapped.
Time for all teams to think deep, as this may be the beginning of the end. As a Indian fan, I will be really afraid of these developments. As the IPL is getting kind of boring and fan base is loosing interest, time for some serious thinking.

on September 15, 2012, 1:04 GMT

People are talking about NBA/NFL/EPL as role models but they forget these teams play many more games to operate. Nobody is going to sit and watch each franchise play 30-40 odd t20 games, which in effect is a cut down version of a proper game of cricket (unlike football, baseball, basketball). Therefore the value and operating costs these franchises can operate under is far smaller and the BCCI are being unrealistic if they think a franchise is worth hundreds of millions.

on September 14, 2012, 19:10 GMT

End of IPL!!!!! Thats it IPL bye bye

on September 14, 2012, 19:01 GMT

dc we will miss u...................

on September 14, 2012, 7:49 GMT

I will stop seeing I.P.L if DC don't play!

on September 14, 2012, 7:13 GMT

Sorry, Vish 57 had already explained the the bank guarantee issue very well. Sorry Vish, I read your post only after I typed out mine and posted it.

Arnobthesinger
on September 13, 2012, 18:00 GMT

oh ,really SAD NEWS FOR DECCAN . . .

Sulaimaan91
on September 13, 2012, 15:53 GMT

The Higher You Climb, The Harder You Fall.It was something waiting to happen.DC are the 1st in a long list to come.

Romenevans
on September 13, 2012, 13:49 GMT

Somebody needs to charge this exhausted team!

on September 13, 2012, 13:28 GMT

I still can't believe, any set of sensible businessmen from Kochi or Pune, who do not have a large pan-India presence with high volume consumer goods will spend $300 million plus, to own a cricket franchise. I don't see any way they will recoup their investment! Had it been an FMCG major like Hindustan Unilever or P&G India, they could have somehow managed to recoup the investment by using it as part of their Ad & Promo budget for some of their top / high volume lines. Even a Coca Cola or Pepsi could have managed it by spreading it over a portfolio of products, that too with global cross subsidization. I won't be surprised if Pune or Bangalore (with the latter's core businesses in doldrums) will be on the block, sooner than later!

on September 13, 2012, 13:28 GMT

Beginning of the end for IPL ???

on September 13, 2012, 12:03 GMT

Dc Have to Play in the Indian Premier League....

on September 13, 2012, 11:51 GMT

This was going to happen...Betting and that to unorganized leads ambiguous results.

sanjaycrickfan
on September 13, 2012, 11:51 GMT

Deccan Chargers has been one of the worst run teams in IPL, in terms of the number of matches they have lost and the quality of players they have selected and how they have been managed. Glad they are going away.

RathishCochin
on September 13, 2012, 11:28 GMT

Brought back Kochi Tuskers Kerala and it will help players to find new destiny without facing more problems...

Otherwise more talented players want to sit on bench in next season...

vish57
on September 13, 2012, 11:21 GMT

BCCI changes the process for different owners; why Kochi was not put in to auction instead they invoked Bank Guarantee last year; Logically they need to re auction Kochi team also on fair justice term. Kochi's BG amount may be high while that of Hyderabad may be low as the bid amount was 1/3 of Kochi team. Long live BCCI and their different yardsticks.

BCCI is responsible for these kinds of issue. Giving franchise ownership to their cronies and pals. Then running IPL as a dictator rather than a demcracy. Insane franchise costs and taking all the profits. They should look at leagues like NFL and NBA in the US and learn.

sre_28
on September 13, 2012, 11:06 GMT

Happy for Hyderabad
Dc best team ever after CSK
MI costliest but worst team ever!!!

on September 13, 2012, 11:05 GMT

when a venture like IPL central focus is MONEY and not the cricket what do we all expect to happen, revenue streams were just not there to recoup the stupid amount of outlay the team owners, BCCI adulation for the green bucks knows no bounds.

satish619chandar
on September 13, 2012, 10:09 GMT

As simple as that. Now the matter closed and Gayathri Reddy stays for next season. Thanks bidders for making things tough for the DC owners.

shivasuresh
on September 13, 2012, 10:08 GMT

BCCI should put DC playres in Auction if no one is ready to takeover DC management....

shivasuresh
on September 13, 2012, 10:06 GMT

Very bad Luck For DC Players......lets wait and see for BCCI's next call...........

No featured comments at the moment.

shivasuresh
on September 13, 2012, 10:06 GMT

Very bad Luck For DC Players......lets wait and see for BCCI's next call...........

shivasuresh
on September 13, 2012, 10:08 GMT

BCCI should put DC playres in Auction if no one is ready to takeover DC management....

satish619chandar
on September 13, 2012, 10:09 GMT

As simple as that. Now the matter closed and Gayathri Reddy stays for next season. Thanks bidders for making things tough for the DC owners.

on September 13, 2012, 11:05 GMT

when a venture like IPL central focus is MONEY and not the cricket what do we all expect to happen, revenue streams were just not there to recoup the stupid amount of outlay the team owners, BCCI adulation for the green bucks knows no bounds.

sre_28
on September 13, 2012, 11:06 GMT

Happy for Hyderabad
Dc best team ever after CSK
MI costliest but worst team ever!!!

anti-dictatorial-attitude
on September 13, 2012, 11:09 GMT

BCCI is responsible for these kinds of issue. Giving franchise ownership to their cronies and pals. Then running IPL as a dictator rather than a demcracy. Insane franchise costs and taking all the profits. They should look at leagues like NFL and NBA in the US and learn.

BCCI changes the process for different owners; why Kochi was not put in to auction instead they invoked Bank Guarantee last year; Logically they need to re auction Kochi team also on fair justice term. Kochi's BG amount may be high while that of Hyderabad may be low as the bid amount was 1/3 of Kochi team. Long live BCCI and their different yardsticks.

RathishCochin
on September 13, 2012, 11:28 GMT

Brought back Kochi Tuskers Kerala and it will help players to find new destiny without facing more problems...

Otherwise more talented players want to sit on bench in next season...

sanjaycrickfan
on September 13, 2012, 11:51 GMT

Deccan Chargers has been one of the worst run teams in IPL, in terms of the number of matches they have lost and the quality of players they have selected and how they have been managed. Glad they are going away.